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Part I – Prices Are Rising at an Accelerated Rate
The price of a home is the major
consideration when deciding whether or not it makes financial sense to purchase
a house. Experts are not only projecting that house values will increase in
2013. They are also more optomistic in the level of appreciation they are
projecting as the market begins to heat up. Here are some examples:
The
Home Price Expectation Survey
The latest survey of a nationwide panel of 118 economists, real estate
experts and investment and market strategists reveals they project home values
to end 2013 up an average of 4.6% according to the first quarter. This
is after they had projected a 3.1% increase just three months ago.
Bank
of America
In a report titled, Someone Say
House Party?, Bank of America analysts revised their projections upward:
“Home prices continue
to show momentum amid shrinking inventory and record high affordability,
prompting us to revise up our original forecast of 4.7% for home prices this
year. We now expect national home prices, as defined by the S&P Case
Shiller home price index, to increase 8% this year.”
Capital
Economics
“Strong demand and
tight inventory have brought existing home sales back to ‘normal’ levels, and
further gains are possible, according to the latest market report from Capital
Economics. Additionally, market conditions may prompt lenders to “loosen the
purse strings slightly” and lend a little more freely.
These conditions,
combined with broader economic indicators, lead Capital Economics to revise its
previous forecast of a 5% price gain this year up to 8%.”
Morgan
Stanley
“Strong momentum in
home prices as well as housing activity gave Morgan Stanley analysts enough
confidence to upgrade their home price appreciation projections to roughly
7% (from 5%) for 2013, according to its latest global securitized credit
report…
“The momentum in most
metrics of housing activity is running well ahead of the pace we had expected,”
said James Egan, Jose Cambronero and Vishwanath Tirupattur, analysts for Morgan
Stanley.”
Not only are prices projected to
appreciate. Experts are actually revising their projections upward as demand
maintains its momentum.
Next week we will look at increasing
interest rates.
Article courtesy of KCM Blog
MacIntyre
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